North Korea's economy saw a 3.7% growth in 2024, the highest in eight years, primarily fueled by significant foreign currency inflows. This economic rebound is largely attributed to arms exports to Russia, reportedly worth over $14 billion since 2023, and continued trade with China. South Korean intelligence estimates that arms sales to Russia, including artillery shells, rockets, and ballistic missiles, brought in between $7 billion and $13.8 billion. There are also suggestions of an additional $500 million earned through military cooperation, potentially in the form of advanced military technology and supplies rather than cash. These revenues are believed to be financing North Korea's nuclear and ballistic missile programs, as well as enabling the import of essential goods like oil and food from China.
China plays a critical role, accounting for up to 95% of North Korea's total trade and 85% of its exports. In 2024, North Korea's legitimate imports, almost entirely from China, totaled $2.33 billion, while exports were a modest $360 million, with fake hair and wigs comprising about 40% of these exports. This strong reliance on China for trade and essential supplies like petroleum, textiles, and electronics underscores Beijing's considerable economic influence over Pyongyang. The increase in Chinese consumer goods and parts has also led to a rise in the use of smartphones and electric vehicles in North Korea.
Beyond military deals and China trade, North Korea's economic gains are also supported by illicit cyber activities, including cryptocurrency theft, which have secured billions of dollars. Additionally, mineral exports, particularly tungsten ore, have seen a significant surge. Exports to China rose 68% year-on-year from January to May 2026, with tungsten ore value leaping nearly tenfold to $88 million, primarily due to rising global prices. While this windfall does not fundamentally alter North Korea's economic landscape, it contributes to its current recovery. Analysts suggest that if these external revenues are strategically invested in domestic industries, infrastructure, healthcare, education, and agriculture, they could build greater economic resilience, although the current recovery is concentrated in Pyongyang and strategic areas, with nearly half of the population still malnourished.
